FOR IMMEDIATE RELEASE
May 24, 2011

CONTACT: John Carey at 202-466-1854
john@ourfinancialsecurity.org

AFR Statement on Mark-up of H.R. 1573

Washington, DC – Americans for Financial Reform, a coalition of more than 250 national and state organizations working together for strong Wall Street reform, issued the following statement today:

Lisa Donner, Executive Director of Americans for Financial Reform:

“H.R. 1573 is bad for investors and consumers, bad for taxpayers, bad for market participants, and bad for the safety and stability of our economy. The bill would both dangerously delay implementation of the derivatives reforms in Title VII of the Dodd-Frank Act and introduce possible new exemptions to those reforms.

The massive unregulated over-the-counter derivatives market was an important cause of the financial crisis and the reforms in the Dodd-Frank Act are designed to make the derivatives markets safer and more transparent. This bill is an effort to weaken the first meaningful attempt to bring oversight to the unregulated derivatives markets that helped create the worst recession since the Great Depression and cost Americans millions of jobs, billions in taxpayer funded bailouts, and trillions of dollars in pensions, home values, and retirement savings.

H.R. 1573 proposes to delay the implementation of the Dodd-Frank derivatives reforms by an additional 18 months, until the beginning of 2013, extending the status quo, and pushing off the changes we need to make the system safer. It lets the biggest Wall Street banks maintain their reckless gambling for that much longer. The legislation would also deprive regulators of tools they need today to fight market manipulation, fraud, and the excessive speculation that has introduced so much volatility into commodities markets, like oil, and speculators could continue to drive gas prices to new heights.

In addition, H.R. 1573 would allow U.S. regulators to completely exempt foreign companies from any U.S. derivatives regulation based on their oversight by foreign regulators. This step could disadvantage U.S. companies relative to foreign competitors and create significant loopholes in the derivatives oversight regime. It is also unnecessary since regulators already have the power to harmonize U.S. regulatory rules with acceptable foreign derivatives regulations.

This legislation is exactly the opposite of what our economy needs – greater transparency and increased safety and soundness for this systemically significant market. AFR is disappointed by this vote and urges Senators to oppose any similar attempts to weaken the derivatives reforms in Dodd-Frank Act.”

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